11 January 2013

ABI: Agreement on the Disclosure of Pension Charges and Costs

The agreement will be implemented by the summer of 2014 for schemes newly established for auto-enrolment, and for all older workplace pension schemes by 31 December 2015. A common definition of all charges to be disclosed at the outset to pension scheme members will be developed in the first half of 2013.

At outset, the Agreement requires:

• consistent and simple disclosure to pension scheme members of all charges payable by members, including any entry or exit charges;
• disclosure of all charges at outset to a standard agreed interpretation of total charges;
• making available historical investment transaction costs (using the IMA’s Guidance) wherever possible, explaining the nature of these costs.

Annually, the Agreement requires:

• disclosure of the total charges taken in the previous year. The intention is that this will be in pounds, either the exact amount or a rounded figure, in each case, where reasonably practical;
• disclosure of the previous years’ investment transaction costs (using the IMA’s Guidance).

The ABI will monitor the progress of the signatories in implementing the Agreement, and provide regular public progress reports. This will include the number of schemes and proportion of the market where the Agreement has been implemented.

Full agreement

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